OpenAI fires back at Elon Musk | Equity Podcast

This episode is presented by invest Puerto Rico if you believe your business Can go anywhere Puerto Rico is the [Music] Place hello and welcome back to equity The Tech runch podcast where we unpack The numbers and the Nuance behind the Headlines this is Alex and today is March 6th 2024 this is our Wednesday show where we Dig into the critical startup and Venture Capital stories from the week Thus far on the show today we have open Ai's latest legal drama monzo's new Mega Round and AI startup that we have our Eye on that you haven't heard of Accenture buing Udacity a regulatory Ruling coming later today that could Have a big startup impact and in the Venture Corner we'll close with the Latest news on open view partners Unwinding let's Go we're going to start with open AI the Most valuable AI startup in the world Today because it intends to try to Dismiss all claims made by Elon musk's Recent law suit and open AI argued that The billionaire entrepreneur who was Involved in the company's co-founding Didn't have that much impact on its Development or success in a blog post That included copies of several Partially redacted emails open AI said That musk only provided about $45

Million to it despite higher initial Commits and that once the company Realized it was going to need billions And billions and billions of dollars and Thus would require a for-profit arm musk Tried to become the for-profit arms CEO And variously hold the majority of Equity and quote initial board control Open AI quote couldn't agree to terms on A for-profit with Elon because we felt It was against the mission for any Individual to have absolute control over Open AI end quote now musk's view Tech Runch notes is that the chat GPT maker Had breached its original contractual Agreements by pursuing profits instead Of the nonprofits founding mission to Develop AI that benefits Humanity now This is a startup story several times Over first despite its weird structure Fame and value open a I is a private Market tech company that is looking to Grow quickly on the back of external Capital and that's just what startups do It's also a startup story because so Very many tech companies both big and Small use its technology today so who Owns open Ai and how it is controlled is Of massive importance for startups and More mature tech companies alike now I Don't know how all this legal Maneuvering that we are seeing at the Moment will shake out maybe you do but I Don't but it is clear to me that open AI

Is so valuable a prized today that Everyone wants a bite of its fruits even If they have launched competing services On their own like Grock now a name you haven't heard us Talk about as much on the show in the Last couple of years is monzo but They're back today because they just put Together a 430 million round yes a mega Round in fintech in 2024 crazy right well the london-based Company's new round does give it a Valuation of4 billion pound or about5 Billion and it was led by Google's Capital G I think that for monzo the new Capital is both a coup and a return to Form recall that the Neo Bank previously Pulled back from the US back in 2020 the Same year it had to take a Down Round But with some executive changes it later Raised at about a $4.5 billion valuation In 2022 I went ahead and looked up its Latest financial reporting and the Company said that it reached Profitability since the end of its Fiscal 2023 and that from its fiscal 2022 to its fiscal 23 Revenue scaled at The company from about4 million to just Under 356 Mill million pound that's a Lot of growth profitability is in there Not a shock that the company was able to Raise though I will say 430 post money Of about 5 billion 4.5 billion valuation

Before kind of a flat round I think Which does go to show how much fintech Companies have been repriced in the last Couple of years anyways Challenger Banks Went through the ringer lately but an Environment of higher interest rates Appears to be doing them a solid so good Job onzo chime go Public enough about the big companies Though let's talk about a much smaller Startup and there's one out there with a Kind of Novel approach to AI it's called Emma I think it's spelled EMA it could Be EMA but Emma just sounds more likely Anyways it's based out of San Francisco And CEO and co-founder seret chattery Says that their company's goal is to Quote build a universal AI in employee And quote to automate the mundane tasks That employees do on a day-to-day basis In every Enterprise so we're talking About AI in the Enterprise woo how novel Right well the company just came out of Stealth with a 25 million round and we Think it was able to raise capital in This very very busy space because the Startups Founders backgrounds include Coinbase Google and OCTA and that's Going to help it stand out from the Masses of other companies also working To bring generative AI Tech to large Companies I'm curious whether we're Seeing too many AI companies build Essentially apps and services instead of

Something lower down on the stack like a New OS that is AI first instead of AI Imbued after the fact or AI assisted if You will like right now Windows 11 feels Like windows with some AI kind of like Slapped onto it that's what a lot of These other companies feel like to me Are they too high should they go lower I Don't know but Emma 25 million very Cool what's next in Tech that's not the Right question it's where Puerto Rico More than just a Tropical Paradise it's An Innovations Paradise where startups And Global players coexist in a vast and Vibrant ecosystem where Talent runs deep Highly skilled and bilingual plus the Island offers the most competitive tax Incentives in the US if you believe your Business can go anywhere Puerto Rico is The place find out more at invest pr.org Crunch two more quick things before we Move on to venture capital news number One Accenture is buying Udacity Udacity If you don't know it's an edte company That reached a$1 billion valuation back In 2015 however given that it was Previously rumored to be on sale for About $80 million I really doubt that The extension deal was worth much more And they did not disclose a price tag Which is a great way of saying that they Don't want to tell you how little they Paid now Accenture wants to build an AI

Training service partially with Udacity's assets and $1 billion of its Own money exenter of course is a big Services company so AI upscaling fits Kind of neatly under its larger umbrella Notably this is technically a unicorn Liquidity event even if the final price Was clearly not what anyone hoped for 8 Years ago and I think it's cool because It does go to show that larger companies Are willing to Shell out for startup Assets as long as they have an AI flavor To them or a way to slot into an AI Theme internally Udacity good job at the Top of the show I promised you a Regulatory ruling coming later today That might have a big impact on startups And who am I to leave you in the Lurch So let's talk about it today the US Securities and Exchange Commission is Going to vote on its much debated Climate disclosure Rule now Tech runes Tant reports that if adopted the rule Would require companies to disclose Greenhouse gas emissions already a Requirement in other economies including The EU and China so why do we care about That it's because the ruling could spur Companies to bolster their current Reporting processes pushing many to seek Outside help and that means startups in The business of carbon accounting could See a big boost and that's not a small List of companies I'm thinking about

Names like Arcadia Watershed carbon Chain Planet forward bend and others so Essentially if the SEC says hey you guys Need to tell us more about your Emissions a bunch of startups are going To say and we'll help you do It put startups down and pick up venture Capital I have one story for you here Regular Equity listeners will recall That we discussed open view Venture Partners demise at the end of 2023 now Venture compal firms do come And go quite often we'll see an older Firm not raise a next fund and slowly Fade away but it was a surprise to see Open view Venture parter say that's it We're done and now we know what they're Going to do with all that money because They had put together a large $571 million fund and according to the Informations Natasha mcaren a former Co-host of this show they're going to Return the majority of that Capital to Their LPS not all of it UNR returned Capital will be used to back the 30 Portfolio companies they currently have That are active sheep reports but this Is still big news and kind of the final Chapter in the particular Saga we have Been discussing recall of course that Open View's choice to stop making new Investments in layoff staff was probably The kind of shock of December 2023 it Turned out that the exit of several key

Employees effectively put a cap on the Company's future but it's still a Surprise and a blow to the Boston Ecosystem that's all the time we have Today but I have some good news before You go which is that this Saturday we Will have an interview coming out with Roger Lee you may recall him as the man Behind layoffs.fyi and an investor in a Startup that helps other startups shut Down so look for that in your feeds this Saturday Maryanne crushed it and I Cannot wait to bring that to you but of Course first on Friday we will have our News Roundup round table so we'll talk To you then in the meantime if you need Even more from us we are Equity pod over On X and threads and we are Tech runch Pods on Tik Tok I'll talk to you soon Bye Equity is hosted by myself Alex Wilhelm and techren Senior reporter Mary An aeto we are produced by Teresa loans Solo with editing by Kell Bryce Durban Is our illustrator and a big thank you To the audience development team and Henry pette who manages Tech runch audio Products thank you so much for listening And we'll talk to you next Time

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